What does the new coalition agreement contain?

At a time of great challenges for Europe and the global economy, the leaders of the three parties of the future governing coalition in Germany, the Christian Democratic Union (CDU), the Social Democratic Party of Germany (SPD) and the Christian Social Union (CSU), presented their co-governance agreement on Wednesday, April 9, 2025, in Berlin.

CDU chairman and potential future chancellor, Friedrich Merz, called the document a clear signal to Europe and a guarantee that "Europe can rely on Germany."

Deep economic and social reform

To jump-start the German economy, which is now in its third year of recession, the German parliament had previously approved a package of measures worth hundreds of millions of euros. But the US president's tariffs are forcing the potential next coalition to take additional measures to ease the burden on industry: For example, by cutting corporate taxes, reducing energy taxes and exempting overtime from taxation. The next government also intends to ease the so-called "active pension", which allows retirees to work tax-free. 

Another major goal is to drastically reduce bureaucracy, in order to make Germany more attractive to both investors and professionals looking for a place to live. For this reason, the coalition aims to create a Ministry of Digitalization, which will focus precisely on this issue. "Old devices, such as fax machines, must be phased out," said SPD co-chairman Lars Klingbeil symbolically, adding: "International markets must receive a clear signal that this is a place to invest.

Migration policy is getting tougher

The coalition agreement also marks a significant shift in migration policy. Conservative Chancellor Merz announced new measures such as border checks and returns, the end of voluntary admission programs, such as for refugees from Afghanistan, and the suspension of family reunification for war refugees. Ukrainians who come to Germany from now on will no longer automatically receive social benefits. The new government also wants to change the citizenship law: “There will no longer be accelerated citizenship after just three years in Germany,” Merz emphasized.

The number of labor migrants from the Western Balkans is halved

The coalition also aims to limit the Western Balkans regulation, which until now allowed the arrival of around 50,000 unskilled workers per year. The number will be halved to 25,000. Migration policy was one of the main topics of the campaign, due to the financial burden on municipalities. As a sign of the toughening, the Interior Ministry will be handed over to the Bavarian Christian Social Union (CSU). 

The Berlin Process remains important

According to the agreement, the integration of the six Western Balkan countries, as well as Ukraine and Moldova, into the European Union (EU) is considered a mutual strategic interest. Therefore, the Berlin Process – an initiative of former Chancellor Angela Merkel – will remain active as a platform to offer the countries of the region clear and sustainable prospects for EU membership.

CDU takes over Foreign Ministry

For the first time in decades, the Foreign Ministry will go to the Christian Democratic Union. It has not yet been announced who will lead it, but several names are being discussed in the media. Among the most talked about is Johann David Wadephul, deputy chairman of the CDU/CSU parliamentary group and a long-time expert on the Western Balkans region. The 62-year-old is the founder of the CDU/CSU parliamentary group for the Western Balkans in the Bundestag, a group that played a strong role in formulating European policies towards the Western Balkans during the government of former Chancellor Angela Merkel. The new German government is expected to be formed in early May, after the agreement is also approved by the three-party base./DW